High Inflation Not Monetary Phenomena

Jakarta (Antara Bali) - Central bank governor Darmin Nasution said  high inflation in March was not caused by monetary problems so Bank Indonesia did not respond it by increasing its reference rate.

"The year-on-year inflation in March indeed reached 5.9 percent but it happened because the price of three commodities had risen due to supply disruptions. When the situation is normal again it is not impossible the price will drop," he said after a board of governors' meeting here on Thursday.

Bank Indonesia governors in the meeting decided to maintain the BI Rate at 5.75 percent, which was considered still consistent with the inflation target set at the range of 3.5 to 4.5 percent in 2013 and 2014.

Darmin said BI also saw the core inflation in March which was recorded at 4.21 percent was not too high yet but was still consistent with the core inflation in the same period last year.

The core inflation is an inflation of all goods and services minus the hike of the food price and other prices set by the government. (IGT)